Case Study of a Currency Crisis: The Russian Default of 1998 (ICPSR 1271)

This paper uses a currency crisis framework to analyze the
currency devaluation and debt default of post-Soviet Russia in August
1998. The authors show that even though the Russian economy recorded
positive growth immediately preceding the default, the atmosphere was
reflective of an impending crisis. The authors then consider the
symptoms of a currency crisis -- specifically public and private debt
responsibilities, devaluation expectations, and contractionary
monetary policy -- and show... (more info)

This paper uses a currency crisis framework to analyze the
currency devaluation and debt default of post-Soviet Russia in August
1998. The authors show that even though the Russian economy recorded
positive growth immediately preceding the default, the atmosphere was
reflective of an impending crisis. The authors then consider the
symptoms of a currency crisis -- specifically public and private debt
responsibilities, devaluation expectations, and contractionary
monetary policy -- and show that they were present in Russia at that
time. Three generations of currency crisis models are reviewed,
followed by speculation that the Russian default was a product not
only of fiscal deficits but also of a fragile financial system and
contractionary monetary policy. The authors address the possibility
that the usual prescription for a currency crisis, that is, increasing
interest rates, may have accelerated the default and that a
case-by-case prescription may afford a better solution than a blanket
policy of increasing interest rates in the face of devaluation.

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Scope of Study

(1) The file submitted is the data file, 0211acd.txt.
(2) These data are part of ICPSR's Publication-Related Archive and are
distributed exactly as they arrived from the data depositor. ICPSR has
not checked or processed this material. Users should consult the
investigator(s) if further information is desired.